New Tax Laws Mean Confusion to Some, Opportunity for Others

The recent modifications to the tax code under the Tax Cuts and Jobs Act (TCJA) represent the most significant modifications in more than three decades, according to the experts at the Advocate Consulting Legal Group (Booth 3272). While the bill was introduced as an effort to simplify the tax code, it has presented many complex questions and uncertainties, along with tax opportunities for businesses to invest in general aviation aircraft.

One of the more substantial pieces of the legislation involves allowing 100 percent bonus depreciation for qualifying new and preowned aircraft,

Advocate Shareholder quoted as Aviation Tax Expert by the Wall Street Journal

Title: Tax Change Helps Executives Afford Pricier Planes

Author: Rachel Feintzeig – Sept. 12, 2018

Source: Wall Street Journal

The recent changes to the tax code are giving business executives a new perk: the opportunity to deduct the entirety of a corporate-jet purchase.

President Trump signed more than 100 changes to the U.S. tax code into law at the end of last year. Among them: The price of a new or used airplane purchased by a company can be a 100% write-off against its earnings.

CONGRESS EASES MEDICAL REQUIREMENTS FOR PILOTS OF SMALL AIRCRAFT

A watershed moment for pilots of light aircraft occurred on July 15, 2016, when the President signed into law a major easing of medical certification requirements for light-aircraft pilots. This change was part of a periodic FAA Extension Act, and has major implications for pilots of small aircraft, who are relieved of some burdensome obligations of medical license compliance. The law instructs the FAA to issue regulations within 180 days implementing the new rules, and does not have practical effect until these regulations are finalized.

FAA ISSUES NEW AIRCRAFT LEASING GUIDANCE

In February 2016, the FAA, for the first time in nearly forty years, replaced its Advisory Circular on aircraft leasing. (AC91-37B (February 10, 2016), superseding and replacing AC91-37A (January 16, 1978).) The new guidance expresses the FAA’s continuing concern over arrangements where operational control is retained by the aircraft lessor, and that thus constitute de facto uncertificated air charter. Also included are some noteworthy additions, such as (a) a statement that the operational control concerns apply to aircraft of all sizes (even though the specific subject of the Advisory Circular relates only to large aircraft,

FAA RULES ON RVSM OPERATIONS: IMPLICATIONS FOR MULTI-OPERATOR AIRCRAFT

On January 24, 2014, the FAA issued a new National Policy on operations in Reduced Vertical Separation Minimum (“RVSM”) airspace. (FAA Notice N8900.250 and Revised FAA Order 8900.1.) One significant topic addressed is that, for aircraft with multiple operators (e.g., multiple lessees of a single aircraft), each one operating in RVSM airspace must possess its own, distinct letter of authorization (“LOA”) issued by the FAA for such operations. The policy further provides for an expedited process to obtain additional LOAs after a single LOA has been issued,